Recently the Competition Bureau announced that it will challenge rules imposed by the Canadian Real Estate Association (CREA) that limit consumer choice and prevent innovation in the market for residential real estate services.
The Commissioner of Competition has determined that CREA’s rules restrict the ability of consumers to choose the real estate services they want, forcing them to pay for services they do not need. The rules also prevent real estate agents from offering more innovative service and pricing options to consumers. The Commissioner’s application to the Competition Tribunal seeks to strike down these anti-competitive rules.
Over the past two weeks, I’ve been asked on a daily basis about the challenge put forth by the Competition Bureau. Here are my thoughts and opinion on this somewhat controversial subject, without prejudice of course.
Now, the important thing is that the consumer will still rely on Realtors to list their property on the MLS. However, there are some problems in the accusations that Commissioner Melanie Aitken has made about Realtors and the MLS. Let’s take a look at a few of them.
Basically, what Aitken is saying is that the tool that CREA has developed is quite remarkable. Fellow Realtors, we should be proud! For CREA, this is a tremendous compliment. The MLS is a power house tool that helps consumers sell their homes fast and gives them the best results possible during the home selling process. CREA has authorized all its members to use this tool. After all, membership DOES have its priveledges. Now, I’m not certain if Melanie Aitken’s parents used to allow her to go into her friends homes and walk out with their toys, or if the kleptomania may have set in later, but it is wrong to want to just take away someone else’s property. She would like CREA to give the tool that was created for their members to everyone. Yes, any brokerages or sales persons not affiliated with CREA should be allowed to list on the MLS is what she is saying. Furthermore, she would like to reduce our service fees to allow us to work for much less than what we are worth, and at the same time open up our profession to others that may be less qualified. Apparently, we need to work for a “reduced cost”? “Reduced” in reference to what?? CREA does not set our fees. That is how we have the discount brokerages like Right At Home, Home At Ease, etc as part of CREA. Aitken then goes on to say “Selling a home is one of the largest financial transactions that most Canadians make in their lifetime,”. This is true, so why would you want them to choose inferior options? Her next statement is “Consumers should be able to choose which services they want to buy in order to facilitate that transaction, including lower-cost options”. Consumers are, and always have been able to select which services they want and how much they want to pay. Maybe Ms. Aitken, you need to sit down with a group of Realtors prior to making the accusations that you have.
The Bureau’s challenge is against rules imposed by CREA on agents who list properties on the Multiple Listing Service (MLS) system. The overwhelming majority of real estate transactions in Canada make use of the MLS system, which includes important information available only to CREA members. Before listing a property on MLS, agents must agree to comply with CREA’s restrictions on the service options they provide to Canadian consumers. Ms. Aitken, if you have a problem with this you are either crazy or have misinterpreted what this means. The reason CREA “imposes” rules on agents is to protect the consumer! CREA is self-governing and its members have a strict Code Of Ethics to follow, unlike the government. When CREA states that we have to present all offers to our clients, it means that should an offer come in, we must disclose this to our clients. It does not mean that if the client wants to review the same on their own, that we say “no”. We assist the sellers in negotiating offers for them. This is NOT a requirement to put an MLS listing on the board, it is a service standard to protect the consumer and ensure they receive value in their investment. Should a client wish to negotiate offers on their own, it is their right to do so. As well, the MLS system is created, owned, and operated by CREA. CREA has put together a system that EVERYONE can use, which is called REALTOR.ca, formerly MLS.ca. Should you wish to market your listing to others without MLS, there are many options including Craigs List, On-line newspaper classifieds, Kijijii, and more. You are correct in that the majority of the transactions are the result of properties being marketed on the MLS system. That is why this system was created by our membership and FOR OUR MEMBERSHIP. Should people want to market their homes without the MLS, they are welcome to do so. Some of the other options are not available to Realtors, such as For Sale By Owner sites. After having spent so much time and money on developing a tool for our members, why should we be forced to give it away? Why should we be forced to allow our intellectual property to be utilized by non-members? Should Microsoft allow Apple to use Windows, just because MAC users do not have access to it? Should Honda share it’s trade secrets with General Motors to allow a “fair playing field”? Since my tax dollars go towards snow removal, shouldn’t my town clear my driveway just as they do theirs? If it is all about protecting the Consumer, shouldn’t “protection” be all-encompassing? Let’s be honest Ms. Aitken, this is not about protecting anyone, it’s a plain and simple witch hunt.
Another disturbing statement: “For example, under CREA’s rules, agents are prohibited from offering consumers the option of simply paying a fee for an agent to list a home on the MLS system. Instead, all consumers looking to list a property on MLS must purchase a pre-determined set of additional services from a real estate agent, such as the presentation of offers and negotiation of a final deal.” Where on Earth did you dig this up from Ms. Aitken? There is no pre-determined set of additional services that need to be purchased from Real Estate agents. Who would want to list a property and not have offers presented or negotiated? You referred to photographs of the home a few times in your accusations. This is not something that is required, it is something Realtors provide – and pay for – as part of our professional services. The goal is to sell the house right?
Aitken goes on to say “The Bureau is focused on striking down these anti-competitive rules, so that real estate agents wishing to offer innovative services can do so, and consumers can benefit from greater choice,”. Ms. Aitken, we have 96,000 Realtors in Canada. I think there is somewhat of a choice available already, and there are as many innovative services as with any other profession - if not more. Aitken states “the market will ultimately determine prices for residential real estate services”, and this is already the case. There is no fixed fee, there are many realtors and brokerages that charge what they deem adequate for the service they provide. The market has been determining prices for real estate services for many years.
Apparently, The Competition Bureau “is an independent law enforcement agency that contributes to the prosperity of Canadians by protecting and promoting competitive markets and enabling informed consumer choice”. Informed consumer choice? It seems the consumers’ informants are not fully educated on the subject they all of the sudden deem themselves to be experts in. By trying to put doubt in the unsuspecting consumers mind that Real Estate Professionals are out to get them will not help people realize the best return on their largest investment. It will jeopardize their livelihood and hurt the Canadian Housing market in a way no recession could ever do. Aitken says that RealtySellers, a discount brokerage from Toronto, went out of business because of their inability to charge lower fees on the MLS. Actually, RealtySellers went out of business because their business model was poor and attracted inferior agents. Which brings us to the main issue Ms. Aitken. The issue is that there are far too many inferior agents out there that should be kicked out of the profession. Your high-handed actions will just encourage more of these agents to get into the business and deteriorate the quality of the Real Estate Sales Representatives in the field. You are not fixing a problem, you are creating it. Garbage in – garbage out, could be a simpler way to put this. Many Realtors leave the business every year. During the 2008 “recession”, quite a few left, yet you show no remorse for them. Ms. Aitken, you seem to take the RealtySellers situation quite personally. Were you a partner in the company?
The only change that is necessary, is for the government to stop wasting tax payers dollars on useless commissions such as yours. What is next? Should we allow everyone access to the Registry office and bring down legal fees, since having Lawyers involved in every transaction is against the competition act – and costly? Should we allow manufacturers to be able to walk into any retail operations and sell their product? Is it anti-competitive to have just one superior court? Where does it end?
This is not about protecting the consumer. It is more about one person’s ego and power trip. The high-handed behaviour being demonstrated by Aitken and her Commission is nothing less than discrimination against Realtors. How else can you explain the forcing of an organization to give up their greatest asset to the general public, an asset that they have developed over the years to help consumers market their greatest asset, and a tool that has been created solely through membership fees? In Aitken’s own words “we expect that if the Tribunal strikes down the anti-competitive restrictions, there will be downward pressure on real estate fees in Canada.” In my humble opinion, this is Discrimination! Enough said.
Asif Khan, Realtor
Re/Max All-Stars Realty Inc.
Google me: Asif Khan Re/Max
Posted via email from Markham Real Estate Today with Asif Khan
One thing I didn't notice in your article here is that CREA did sit down with the Commissioner to talk about changing the wording in our rules to reflect these so called "anti-competitive" statements. Problem is, they played like children and left the table in a unprofessional fashion...CREA was professional, they stayed at the table, and as of March 22nd, it's membership voted to make those changes without our hands being forced...why, because REALTORS® are a professional bunch! Ok, Mel, you are up to bat.....
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